To be sure, its role in international trade looks impressive, but that doesn\u2019t necessarily prevent its decline as a reserve currency.<\/p>\n

When asked which currencies stand the best chance as a challenger, Jane said all others have flaws, especially as international currencies.<\/p>\n

\u201cBut if I have to guess,\u201d he said, \u201cit should be [euro] And this [yuan] having almost identical appearance. Such a \u2018triangular\u2019 reserve currency configuration also makes sense and is more aligned with the economic weight of the three blocs.\u201d<\/p>\n

For China in particular, Jen said the country\u2019s financial sector must first improve in quality for the yuan to make progress.<\/p>\n

Foreign investors, he explained, are wary of buying into Chinese equities and bonds.<\/p>\n

\u201cWithout overseas demand for Chinese assets, Chinese savers and households may not be allowed to invest overseas, and thus capital controls will need to be maintained,\u201d the economist said. \u201cWith capital controls, it would be difficult to [yuan] To become a viable international currency.\u201d<\/p>\n

And while some announcements of bilateral trade are being settled with China\u2019s currency, those volumes are small, and do not compare to the volumes seen in larger financial flows, according to the eurozone.<\/p>\n

Talk of de-dollarization has increased of late amid growing signs of a tilt away from the US currency. For the first time, the yuan overtook the US dollar last month as the most widely used currency for Chinese cross-border transactions.<\/p>\n

Meanwhile, Ruchir Sharma, chairman of Rockefeller International, said that central banks are moving from the US dollar to gold. He wrote in the Financial Times earlier this month that central banks account for a record 33% of monthly global demand for gold and are buying more gold than at any time since data began in 1950.<\/p>\n

Still, the dollar\u2019s share of global currency transactions for trade finance was 83.7% compared to the yuan\u2019s 4.5%, with analysts saying the yuan is too tightly controlled by the Chinese government.<\/p>\n

Source: markets.businessinsider.com<\/p>\n

<\/p>\n